Jim Koch, brewer and founder of Samuel Adams at the Boston Beer Company, found himself painting a community center in South Boston in 2007 and vowed to find a smarter way to add value. His program, Samuel Adams Brewing the American Dream, is working to create jobs and provide pro bono services to local businesses.
Jim and I spoke recently about his evolution as a philanthropist and contemplated a new line of beer named after another former Massachusetts governor, Mitt Romney.
Why did you name your signature beer after Samuel Adams?
Well honestly, when I named my beer Samuel Adams, nobody knew who Samuel Adams was except for historians. He was a brewer and a patriot and he started a revolution. Here I was a brewer, and making an American beer, this was in 1984, when there were no craft brewers in the United States at that time. I was hoping that Sam Adams might create a little bit of American beer independence in the same way that Samuel Adams, the brewer and patriot, created political independence.
He was the governor of Massachusetts, right?
Right. Which at the time was not quite as important a job as President, but almost.
If you were to design a new beer after a more contemporary Massachusetts Governor, Mitt Romney, what would be some of the key flavors you would use?
Well, I know I wouldn't put any alcohol in there.
So, besides brewers, what roles does a company like the Boston Beer need on its staff?
We have the same needs as any small business. When I started, I had to wear all of these hats, but now somebody's got to buy the ingredients, make sure that the barley gets delivered, somebody has to do a quality check on the barley and somebody has to read the invoice and agree to the terms. I'm just focusing on barley at this point but the same process is true for everything we do.
Don't you need business functions like marketing too?
Not really. This is my own sort of pet peeve if you will; everybody who's not in business thinks marketing really matters, that customers buy what they buy because of some clever marketing. Most people in business really don't believe that. But people who write about business, for some reason, still believe in the magic of marketing. And I've had this conversation fifty times.
Just think about it. You buy lots of products, right? You buy the products you buy because you like them, you think they represent good value, they do what they're supposed to do, you've had good experiences with them, friends have said good things about them. You buy things for all of those reasons. The idea that you buy something because you saw a clever ad...
But I got to refute it by saying I recently saw one of your ads that I think had you in it, and I was like, that's one good-looking guy. I think I should be drinking this beer.
Oh there you go. Well sometimes, somebody on the ad is just so drop-dead handsome.
So, as a super model leading a company, what do have the company do to "give back"?
In the summer of 2007 we were doing one of those community service days where a lot of people in the company went to a community center in South Boston and spent the whole day there painting.
The people who ran the center thanked us for all the work we put in there. We probably had 30 people there. And everybody felt really good about the day. But I didn't. We just did this nice thing. And then I thought, well, I'm an entrepreneur. I know why I don't feel good about it. Because we just took 30 very talented, capable people with a lot of good business skills, and we spent a day painting. And we're not the most talented painters.
We probably did 800 dollars' worth of painting, and we probably spent ten thousand dollars' worth of management time and labor. Why should I feel good about all the value that I destroyed today?
So that was my epiphany, and I thought, you know, if we're going to do this kind of thing, we're going to do it in a way that creates value, that multiplies the value of our capabilities and that leverages our entrepreneurial nature.
That is a big epiphany and one that 99% of companies have yet to have.
Yeah. Our approach rules out giving money away through the conventional philanthropic activities. Many times they take money from one pocket, i.e. a company's pocket, and put it into somebody's favorite philanthropy. That might be good or bad, but I had a higher aspiration. All philanthropy is good, but I wanted something better.
So, what did you end up doing?
We started a program called Samuel Adams Brewing the American Dream. And the purpose of it is to help small businesses grow, create jobs in their community, and succeed. I learned from my experience starting Sam Adams that small businesses desperately need loan money and nuts and bolts business advice. So we designed a program to make micro loans up to $25,000 available to small businesses. Then we provide coaching, mentoring advice, assistance, along with a loan which makes it more likely to get paid back.
We focus on food, beverage, and hospitality small businesses including craft brewers. So it's not general business... if you're starting a biotech company, I've got no good advice to offer you. We only wanted to work with businesses where our expertise was of significant value to them in helping them succeed and grow.
At the end of the day, however, it's not an investment. The money's gone. We're on our second million contributed to the program. So at the end of the day, from my point of view, it is a philanthropic activity, just one that is leveraged properly to create a lot of value. We've made over 150 loans, affected 1000 jobs and coached almost 3000 businesses.
Is this the same kind of philanthropy you do at home?
My wife handles a lot of that and it's a little bit more driven by personal connections, people and things we know. The success that I've had has taught me that, in our society, there are people who are more fortunate than deserving. And there are people who are more deserving than fortunate. And there is some good karma in redressing that balance.
The Boston Beer Company has taken the Billion + Change pledge, volunteering its best business skills and talents to serve the needs of nonprofits and communities at home and around the world. Together, Billion + Change pledge companies are inspiring the largest commitment of pro bono and skilled volunteering in history. Has your company taken the pledge? Learn how at http://www.abillionpluschange.org